WA House RSG - Committee Meeting
(February 7, 2023)

Here are some observations from the Tuesday February 7th Washington State House Regulated Substances and Gaming Committee (WA House RSG) Committee Meeting.

My top 4 takeaways:

• A briefing covered HB 1612, “Concerning the regulation of products containing THC,” Washington State Liquor and Cannabis Board (WSLCB) request legislation which would place restrictions on manufacturing and sales of hemp cannabinoid products (audio - 4m, video).
  • The legislation represented a second attempt by WSLCB leaders to design legal limits for hemp consumable products available outside of the licensed cannabis system. The companion bill, SB 5367, was heard on January 30th in the Washington State Senate Labor and Commerce Committee and was scheduled for executive session on Monday February 13th.
  • Peter Clodfelter, WA House RSG Committee Counsel, explained the effects of the proposal from the bill analysis:
    • Differentiates between certain hemp and cannabis products intended to be consumed or absorbed inside the body based on tetrahydrocannabinol (THC) concentration.
    • Adds a definition of ‘hemp consumable’ to hemp statutes and modifies the definitions of ‘cannabis,’ ‘cannabis product,’ and ‘THC concentration’ in the Uniform Controlled Substances Act.
    • Modifies authorized activities of licensed cannabis producers and processors regarding enhancement of cannabidiol (CBD) concentration in cannabis products.
    • Requires the label on a cannabis product package to include the amount of any synthetically derived CBD in the product sold or provided to the ultimate user.
    • Prohibits the manufacture, sale, or distribution of cannabis or cannabis products without a state-issued license.
  • The fiscal note from state agencies included projected expenditures by WSLCB of $440,396 in the 2023-25 biennium, and $318,564 in subsequent bienniums, sums that were identified in the SB 5367 fiscal note. However, the note for HB 1612 featured analysis by the Washington State Patrol (WSP) showing $2,697,896 in costs for the 2023-25 biennium, and $598,564 in each biennium after. Their staff attributed “changes to evidentiary standards that will impact the WSP”Crime Laboratory Division (CLD) requiring new equipment and protocols, along with staff hours “to provide evidence testing that meets the new definitions of the proposed legislation to the extent scientifically possible.”
    • A day later during the February 8th Executive Management Team (EMT) meeting Justin Nordhorn, WSLCB Director of Policy and External Affairs, expressed a surprise at the WSP fiscal note, calling their projected costs “a bit confusing because last year was quite high and when we worked with them over the summer and…we seem to receive an indication that this would be easier to to work with, and it would be potentially less work than they would have had last year.” He was uncertain about “what has changed in those assumptions” (audio - 1m, video - TVW).
    • Curiously, Cannabis Observer reached out to staff at the WSP Crime Laboratory on January 31st to inquire about their analytical capabilities, specifically asking, “Which cannabis-related analytes is the lab able to test for? e.g., delta-9-THC, metabolites thereof, delta-8-THC, other hemp-derived synthesized cannabinoids, fully synthetic cannabinoids like Spice, etc.” WSP Director of Communications Chris Loftis replied, “The analytical instrumentation utilized by CLD scientists is capable of identifying virtually any chemical compound, thus all THC’s (delta-9, delta-8, CBD etc.), any hemp-derived synthesized cannabinoids, synthetic cannabinoids, and all “spice” compounds.  We don’t analyze for metabolites as the analysis of biological samples is the purview of the State Toxicology Lab.”

• Supporters included government representatives, public health officials, and substance use prevention advocates wanting to eliminate underage access to products with cannabinoids like tetrahydrocannabinol (THC).
  • 29 individuals registered their support of the bill (testifying, not testifying).
  • Co-Chair and primary bill sponsor Shelley Kloba noted the many pieces of legislation in 2022, none of which were passed by legislators, and appreciated WSLCB staff who “continued on with this important issue.” She identified multiple “areas” in which she felt her bill was important (audio - 4m, video):
    • Youth Access - “These new Innovative products came into the market and there's not a whole lot of consumer education or understanding about them, and many of the producers” were “very happy to sell to anyone of any age across state lines…and again this committee is concerned about youth access.”
    • Labeling - “Washington consumers who purchase products from the legal market have an understanding that…what is on the label is in the package.” With unregulated hemp items, “sometimes people buy these not understanding what THC or Delta 8 THC is, sometimes assuming that it's a CBD product.”
    • Fairness - “All of the licensees work very hard to follow all the rules…at great expense in a lot of ways, that they have to make these investments to make sure that they're following all the rules. There were some innovative new products that came online, largely driven by an overabundance in the hemp space” occurring “partly because we do not have the appropriate infrastructure to process hemp into all of the amazing things that can be turned into…The fairness piece of that is, everybody who's following all the rules ends up sort of competing for the same customers with all these folks who have none of those restrictions.”
    • Kloba summarized that “to allow this…incursion of hemp from anywhere into the [Initiative] 502 market really kind of blows up the whole thing and at the ten year mark that is not the direction we need to be going.”
    • Representative Jim Walsh questioned if "clever entrepreneurs won't find a way” to put “unanticipated products" on the commercial market, and if this would turn out to be an “ongoing effort.” Kloba felt "innovation is a good thing" and that continued attention of lawmakers to the cannabinoid market was likely. “There's a lot of ingredients in them that we have no idea about,” she observed, referencing the “great deal of testimony the other day about high THC products among youth and the damage that appears to be related to that; not all the studies break out where the THC came from.” Kloba expected they needed to stay vigilant of products those under 21 “could buy online because the [cannabis] retailers are not selling to underage” buyers (audio - 2m, video).
      • During the February 8th EMT, Director of Enforcement and Education Chandra Wax, noted the compliance with not selling age restricted products to youth was highest for cannabis businesses at 96% (audio - 9m, video - TVW).
  • Justin Nordhorn, told committee members that after bringing a “very, very complicated bill” forward last year, HB 1612 was “really focused on what is the most important thing that we heard from communities” which was youth access to hemp cannabinoid products. It removed the “delta-9 categorization because that's very limiting when it was first created in the Uniform Control[led] Substances Act,” he stated. However, since there were “a multitude of different particular THC types of chemicals,” Nordhorn explained that they’d suggested a threshold of one milligram (mg) of THC per serving, and no more than three servings in a product as this represented “some scientific studies that we had looked at where they talk about the lowest observable adverse effect level” being a serving of 2.5mg of THC (audio - 4m, video).
    • He elaborated that since 5mg of THC was recognized as a federal standard in measuring adult servings, the intention was for no single package to have an adult serving of the compound while maintaining “space for some of the full spectrum products that are out there because we know there is going to be THC in some of these other products.”
    • The legislation clarified “what they can and cannot sell” for businesses in the state or online, Nordhorn reported. The bill was “very distinctly clear that there is a licensing requirement, if you are selling something that's above the threshold you're required to be licensed by the State,” he said, aiming to reduce access “in those unlicensed locations across the state…as well as internet sales.”
  • Bob Cooper, Washington Association for Substance Abuse and Violence Prevention Lobbyist, appreciated the work of WSLCB staff and claimed voters had backed a “regulated” and “closed” market for THC. He supported the bill because “however they re-engineer this, whatever they come up with…it very simply comes down to: it walks like a duck, it talks like a duck, you treat it like a duck...it's cannabis, it's THC, and you regulate it, period” (audio - 1m, video).
    • Representative Kristine Reeves was “struggling with…particularly as an economic developer” figuring out “at what point do you believe that the regulations that we provide treat this as an industry, as an economic industry, that provides revenue to the state versus…a regulated market that focuses on prevention.” Cooper believed prevention concerns benefited from “basically a closed ecosystem” of cannabis production and retail in the state, believing “that’s what we were sold in the initiative” and the market should stay that way. “It's an industry, it's an economic contributor, it's a business, I get that,” he said, and “I think that personally they should also be allowed access to the banking system so they are more of an industry…and treated more normally.” Cooper compared the closed system for Washington cannabis to his view that “Apple Computers is a closed ecosystem. They're doing quite fine” (audio - 2m, video).
  • Several other public health and WASAVP representatives spoke up in support of the legislation to stop products that posed a “public health risk to both adults and youth" from being available “right next to the candy section":
    • Cora Breuner, Washington Chapter of the American Academy of Pediatrics Member (audio - 3m, video)
    • Lacy Fehrenbach, Washington State Department of Health (DOH) Chief of Prevention (audio - 3m, video)
      • Ranking Minority Member Kelly Chambers sought clarification that the number of adverse events mentioned by Fehrenbach was nationwide, rather than in Washington alone (audio - 1m, video).
    • Linda Thompson, WASAVP President (audio - 2m, video)
    • Scott Waller, WASAVP Board Member (audio - 3m, video)

• Opposition to the bill included hemp and cannabis sector members, a dietary supplements retailer, and a concerned citizen who raised issues about the THC threshold and alleged WSLCB would gain control over what constituted hemp, along with lobbying for different legislation discussed by some hemp in food task force members.
  • 23 individuals registered their opposition to the bill (testifying, not testifying).
  • Bonny Jo Peterson, Industrial Hemp Association of Washington (IHEMPAWA) Executive Director, testified that she was part of the Washington State Hemp in Food Task Force and was against the bill as she believed it “still allows delta-8 and THC-O[-acetate]” “outside of the regulated market.” She doubted the bill would stop sales of products with synthetic compounds, “I don't even want to call them cannabinoids.” Peterson called for “multiple amendments, as well as the hemp in food task force stakeholder bill that has not gotten a sponsor yet” to be incorporated into the measure (audio - 3m, video).
  • Several cannabis and hemp representatives spoke against the bill, many having testified against SB 5367, criticizing the impact it would have on their businesses or organization’s members.
    • Adán Espino, Craft Cannabis Coalition (CCC) Executive Director (audio - 3m, video)
    • Kristofer Plunkett, Cascadia Hemp Company Founder Testimony - Kristofer Plunkett (audio - 3m, video)
    • Joshua Rutherford, Dutch Blooms Principal (audio - 3m, video).
    • Joshua Schneider, Association of Western Hemp Professionals (audio - 2m, video)
      • Kloba delved deeper into why Schneider’s organization was interested in hemp consumable products “as opposed to trying to emphasize all of the infrastructure we could put in place in order to make hempcrete and renewable natural gas and all the foods and the fibers.” Schneider viewed the situation as a “yes/and” proposition where multiple opportunities for hemp industrialization and commercialization should be embraced. He said, “infrastructure around fiber and grain offer [an] incredibly promising future, but they do require substantially greater infrastructure investment and are not kind of a small modular approach” (audio - 3m, video).
  • Alan Lewis, Natural Grocers Vice President for Government Affairs, Stakeholder Relations, and Organic Compliance, was concerned the legislation would impact the “large family" of full and broad spectrum CBD supplements that a "broad swath of consumers depend on" and which his company sold (audio - 2m, video).
  • Jim MacRae, an “interested potential consumer," objected to the “inappropriate” expansion of WSLCB authority to “define ‘hemp’ as what cannabis is not,” and argued he “read this stuff as making some specific changes to seeds, to fiber, to stocks for plants, and which have nothing…to do with the stated of goal of the thing” (audio - 3m, video, written testimony).

• Five cannabis industry representatives testified as ‘other’ on HB 1612 owing to concerns that the permissible amount of THC in products made impairment from consuming multiple packages possible, and that the cannabinoids shouldn’t be allowed beyond the legal cannabis system.
  • Five individuals registered a position of ‘other’ on the bill (testifying, not testifying).
  • Two individuals from the cannabis sector offered remarks as ‘other’ on SB 5367 and were joined by people who took issue with how cannabinoids were defined and the allowable THC threshold.
    • Lukas Hunter, Harmony Farms Director of Compliance (audio - 2m, video)
      • Kloba inquired if Hunter thought that if “CBD would work better in the presence of a small amount of THC…you're not against that product, but if it's going to have a certain amount of THC, that's a 502 product. It's no longer a hemp product.” Hunter agreed her impression was “absolutely correct” (audio - 1m, video).
    • Micah Sherman, Washington Sun and Craft Growers Association (WSCA) Board Member and Raven Co-Owner, read section 4(1)(d) as allowing labeling for “the amount of any synthetically derived CBD in the product sold or provided to the ultimate user” and didn’t agree with allowing a pathway for synthetic compounds “to be sold in the regulated cannabis market.” Synthetic CBD could be created from yeast or orange peels, he told lawmakers, and setting up a system where they could eventually be part of legal cannabis items amounted to “moving drug development into a regulated marketplace for a plant.” He wanted state drug laws and an interpretive statement from WSLCB to continue to be used to stop synthetic cannabinoids from being in the legal market, and asked for revisions so that HB 1612 was clear “that synthetic cannabinoids are not a part of the cannabis industry and should not be sold in the 502 system” (audio - 3m, video).
    • Ezra Eickmeyer, Producers Northwest Executive Director (audio - 3m, video)
    • Vicki Christophersen, Washington CannaBusiness Association (WACA) Executive Director and Lobbyist (audio - 2m, video)
  • Amber Wise, Medicine Creek AnalyticsScience Director and WA Hemp in Food Task Force Member, provided several "specific issues and proposed amendments" she thought would help accredited cannabis laboratories comply with the bill “as well as to align with other groups’ work in this area” (audio - 3m, video).
    • Wise addressed a proposed definition change for ‘THC concentration’ which added “including any hydrogenated or structural isomer forms of THC.” She said this term was “highly problematic from a compliance lab testing perspective for a couple reasons. The terms ‘any hydrogenated or structural isomer forms’ could encompass any number of molecules that the labs are not able to test for.” Wise conveyed that to do so entailed developing new processes, and using “certified reference materials” she believed were “not currently commercially available,” rendering the bill “impossible for the labs to comply [with,] and impossible for the State to enforce.”
    • In proposed changes to laws on labels for cannabis products in Section 4, Wise called out the words “the amount of any synthetically derived CBD in the product sold.” She stated this confused her as she wasn’t aware of “any synthetically derived CBD on the market; there's too much plant derived CBD, which is then being synthetically converted into other molecules.” She asked for amended language to remove the phrase.
    • “And finally, I recommend including language in this bill from the hemp in food task force draft bill for a pilot program so the state agencies can be aligned, and the legislatively mandated task force's work” could be implemented, commented Wise. She said her suggestions were “small, but really important clarifications to ensure that the testing labs are able to comply with these rules.”
      • At time of publication, Cannabis Observer had not seen a draft of the WA Hemp in Food Task Force stakeholder bill to authorize hemp cannabinoids in foods, beverages, and dietary supplements. Though not an official part of the task force recommendation and not endorsed by the Washington State Department of Agriculture (WSDA), the potential legislation was mentioned at the group’s first meeting in July 2022 and reviewed at their most recent meeting on January 11th.
      • During his discussion of HB 1612 at the February 7th WSLCB Board Caucus, Director of Legislative Relations Marc Webster acknowledged there were “some other amendments floating around” which would carve out room for hemp cannabinoids in foods, beverages, and dietary supplements (audio - 2m, video - WSLCB, video - TVW).